CMP:
Rs. 495.15; Accumulate between 475 - 495 levels.
Medium to Long term Target – Rs. 522.50 - 544.50; STOP LOSS – Rs. 437.00; Market
Cap: Rs. 1,961.63 Cr; 52 Week High/Low: Rs. 565.85 / Rs. 202.55
Total
Shares: 3,96,16,995 shares; Promoters : 1,22,95,970 shares –31.04 %; Total
Public holding : 2,73,21,025 shares – 68.96 %; Book Value: Rs. 157.20; Face Value: Rs. 10.00; EPS: Rs.
15.39; Dividend: 10.00% ; P/E: 32.17 times; Ind P/E:
33.37; EV/EBITDA: 20.36.
Total
Debt: 601.44 Cr; Enterprise Value: Rs. 2,277.14 Cr.
PVR: PVR Limited was incorporated
in 1995 and is based in Gurgaon, India. PVR LTD was incorporated in April 1995
pursuant to a joint venture agreement between Priya Exhibitors Private Limited
and Village Roadshow Limited, one of the largest exhibition companies in the
world. PVR Limited is an India-based company that operates movie houses in
India. PVR Ltd came with an IPO on 8th December 2005 with an issue price of Rs. 225/share and raised about Rs. 173.25
Cr with an objective to utilize the proceeds to finance the then new cinema
projects in various cities across the country, to expand the film distribution
business, technological up gradation and renovation of cinemas. The
Company also generates revenue from in-cinema advertisements/product displays
and in-cinema sale of food and beverages. It also produces and co-produces
movies; and distributes movies, as well as operates 24 lane bowling centers.
The company operates 213 screens in 46 cinemas in 27 cities. Company’s
subsidiaries include CR Retail Malls (India) Limited (CRR), PVR Pictures
Limited (PVR Pictures) and PVR bluO Entertainment Limited (PVR bluO). The
Company has diverse cinema circuit in India consisting of 35 Cinemas with 154
screens spread over 20 different cities: Delhi, Faridabad, Gurgaon, Ludhiana,
Ghaziabad, Mumbai, Bangalore, Hyderabad, Chennai, Lucknow, Indore, Aurangabad,
Baroda, Allahabad, Ahmedabad, Udaipur, Chandigarh, Surat, Latur and Raipur. PVR
Ltd announced the opening of a multiplex on August 15, 2012, at Empress Mall,
in Nagpur in the state of Maharashtra. The multiplex consists of five screens.
On January 8, 2013, PVR through its wholly owned subsidiary Cine Hospitality
Private Ltd purchased a controlling stake of over 69 % followed by the open
offer for another 26% in the Cinemax India Limited for Rs. 395 Cr or Rs. 203.65
per share from the Rashesh Kanakia and family.
PVR Ltd is locally compared with Prime Focus ltd, Reliance Broadcast Network
Ltd, Balaji Telefilms ltd, Media Matrix Worldwide Ltd, Shree Ashtavinayak Cine
Vision Ltd, Tips Industries Ltd, Fame India Limited, Cinemax Properties Ltd,
Era E Zone (India) Ltd, Pyramid Saimira Theatre Limited and Inox Leisure Ltd and
globally compared with Walt Disney Co of US California, Time Warner Inc of USA,
IG Port Incorporated of Japan, Twenty First Century Fox, Inc of New York, Lions
Gate Entertainment Corp of California,
UTV Media PLC of UK, Dreamworks Animation Skg Inc of California, Orange
Sky Golden Har. Ente. Holdings Ltd of Hong Kong, Kinepolis Group NV of Belgium,
Cinemax X AG of Germany, Digital Cinema Destination Corp of United States and
Reading International Inc of United states.
Investment Rationale:
Priya Village
Roadshow (PVR) Cinemas is a
leading cinema chains in India. The company began as a joint venture
agreement between Priya Exhibitors
Private Limited and Village Roadshow limited in 1995 with 60:40 ratios. PVR is on a spree
of opening new multiplexes it opened cinema halls in Ambience mall, Gurgaon in
2007 named “PVR Ambinece Premier” as first 2K Dolby Digital multiplex with five
Premier class auditoria and two Glod Class auditoria. Currently PVR controls 398 including 135 Screens with Cinemax
India Ltd at 92 locations across 37 cities in 13 States and 1 Union Territory. It also plans
to open another 500 screens by 2015. PVR commands a significant presence in New Delhi and NCR with 55
screens in 16 multiplexes. PVR also has its strong presence in Chandigarh,
Bhopal, Ludhiana, Nagpur, Chennai, Lucknow, Indore, Hyderabad, Bangaluru,
Mumbai, Nanded, Ahmedabad, Kochi, Udaipur, Vijayawada and Visakhapatnam. PVR
recently launched its premium brand, PVR Premiere, targeting urban consumers in
metros. The company operates three other brands, PVR Talkies, the no-frills
cinemas for consumers in tier II cities, the original PVR Cinemas targeted at
the urban & semi-urban consumers and PVR Director's Cut for ultra luxury
watching. Recently
PVR opened a Multiplex at Diamond Plaza Mall, Jassore Road, Kolkata in the
State of West Bengal, this is of Five Screens Multiplex and is fitted with
latest Sound and Projection System. PVR opened another Multiplex at Koregaon
Plaza Mall, Pune, Maharashtra; this is a Seven Screens Multiplex with 1519
Seats operational from 8 September 2013 fitted with latest Sound and Projection
System. PVR has witnessed a very good increase in Footfalls and Average Ticket
Price. The footfalls in Q1FY14 were higher on account of the
good box office performance by movies like Yeh Jawani Hai Deewani, Raanjhnaa
and Aashiqui 2. Footfalls increased from 1.15 Cr in Q4FY13 to 1.51 Cr in the
current quarter. The addition of 23 new screens in the PVR portfolio helped to
the increase the footfalls numbers. The company has also been able to report an
impressive hike in ATP, which increased from Rs. 172 and Rs. 153 in Q4FY13 to
Rs. 174 and Rs. 160 for PVR and Cinemax properties, respectively. The
management indicated the ATPs of screens with similar stature of PVR and
Cinemax would converge subsequently as the company would hike Cinemax’s ATP as
and where suitable. PVR reported its Q1FY14 numbers, with a top line of Rs.
335.2 crore on the back of higher-than-expected footfalls, which increased to 1.51
Cr. The company reported a consolidated EBITDA margin of 17.7 % while the
EBITDA for the quarter stood at Rs. 59.4 crore, growing 76 % YoY. However,
exceptional item on account of write-off of CWIP towards discontinued projects
and provisions for items under litigation marred PAT, which came in at Rs. 13.6
crore. The property expansion in this quarter has been impressive along with
remarkable increase in ATP. It is expected that PVR could launch 48 more screens
in this fiscal.
Outlook and
Valuation:
PVR DIRECTORS CUT VASANT KUNJ |
KEY FINANCIALS | FY12 | FY13E | FY14E | FY15E |
---|---|---|---|---|
SALES (₹ Crs) | 513.10 | 809.70 | 1,410.50 | 1,595.40 |
NET PROFIT (₹ Cr) | 25.40 | 44.50 | 85.70 | 107.10 |
EPS (₹) | 9.80 | 11.20 | 21.60 | 27.00 |
PE (x) | 35.70 | 31.20 | 16.20 | 13.00 |
P/BV (x) | 3.30 | 2.20 | 1.90 | 1.70 |
EV/EBITDA (x) | 19.40 | 15.80 | 7.40 | 6.10 |
ROE (%) | 9.10 | 6.90 | 11.80 | 12.90 |
ROCE (%) | 9.00 | 6.00 | 11.30 | 11.90 |
VIEW THE POWER POINT PRESENTATION ON